Global financial crisis and its impact on global trade trends and WTO

Abstract

The modern economic and financial crisis has caused a significant reduction in trade flows for the first time since the Second World War, so it is often referred to as the trade crisis. Despite many benefits and disadvantages of liberalization as key contemporary features, the current crisis has led to re-examination of these attitudes affecting the introduction of protectionist measures and to strengthening of regional ties and numerous alliances. The question that arises is how trade flows will look like in the future and whether regional integration will prevail over multilateralism and the liberalized multilateral trading system. The financial crisis quickly became an economic crisis that hit all sectors. The first visible effects of the crisis were reflected in a sharp fall in trade flows that were conditioned by drop in demand, what led to fall in production and employment. The first reaction of many countries was to take protectionist measures in order to protect their national interests. This is again aroused a debate among proponents of liberalism and protectionism, where the effects of the emergence of the crisis favoured the latter. Economic decision makers are faced with the pressing economic problems and they tried to mitigate them (at least in a short term) turning to regional partners and less to the world market. [Projekat Ministarstva nauke Republike Srbije, br. br. 179029: Srbija u savremenim međunarodnim odnosima: Strateški pravci razvoja i učvršćivanja položaja Srbije i međunarodnim integrativnim procesima - spoljnopolitički,međunarodni ekonomski, pravni i bezbednosni aspekti]

Keywords

• financial crisis
• trade trends
• globalization
• regionalization
• WTO